The Chancellor has today confirmed that employers will see their NI contributions rise from April 2025 by 1.2 percentage points, to 15pc. At the same time the Government will also lower the threshold at which employers start to pay NI contributions on an employee’s salary, from £9,100 per year to £5,000.
The employment allowance will be maintained with more than 865,000 small businesses being exempt under changes which will increase the employment allowance from £5,000 to £10,500.
There are no proposed changes to Employee’s NI contributions.
This is a significant change for employers and is anticipated may increase Employer’s NI by £25bn. Already economists are indicating that this could lead to reduced recruitment and lower than expected pay rises for staff next year. We will have to see if this plays out or whether wage inflation continues to remain strong.
If you have any queries relating to this change please contact our Employment Team on 0345 646 0406 or complete an online enquiry form, and a member of the team will be in touch.